The Great Disruption

By Bryan Walker 29/03/2011

The Great Disruption: How the Climate Crisis Will Transform the Global EconomyAustralian Paul Gilding straddles the NGO and corporate worlds. A former international head of Greenpeace, he subsequently moved into consultancy with global corporations and others on the transition to sustainability. Transition can sound a comfortingly gradual process, but that’s far from the case with the transition foreseen in his striking new book The Great Disruption: How the Climate Crisis Will Transform the Global Economy.

Gilding stands firmly with those who have been warning for half a century that our economies are pressing environmental limits to breaking point. Their warnings have now become realities. We have passed the limits of the planet’s capacity to support our economy. Ecosystem change and breakdown is now under way globally. Gilding takes his stand on the science, whether of climate change or the many other areas where sustainability is crumbling.

We didn’t heed the warnings. So now change will be forced upon us by actual physical consequences. The laws of physics, biology and chemistry defy the dream of ever-growing economies. We will throw everything we can at keeping growth going, as we did in 2008, and there will be measures of apparent success, but we can’t succeed because of the physical restraints of resource availability and the physical response of the global ecosystem, particularly the climate, on which our economy depends. The economy cannot keep growing and we will soon experience what Gilding calls the Great Disruption.

This means sustained economic downturn and a global emergency lasting decades. Climate change, particularly melting polar regions, extreme weather events and changes to agricultural output, will drive a series of ecological, social and economic shocks. This will lead to strong government intervention and generate a sense of global crisis. Sustained increases in food prices will trigger economic and geopolitical instability. The key ecosystem services of water, fisheries and agricultural land will be further reduced in capacity. Oil prices will continue to rise. Risk in global share markets will be repriced, leading to a dramatic drop in the markets and a tightening of capital supply.

Too pessimistic?  A natural optimist, Gidding doesn’t think so. But he is at pains to say that he’s not foreseeing an inevitable slide into collapse. He’s talking about major and highly unsettling disruption, but a disruption that will in turn drive a transformation of extraordinary speed and scale. People ask why he thinks we can escape collapse. He explains. First, climate science denial will evaporate virtually overnight when the risk of collapse is in our faces. When climate change hits it will hit economically and people at large will pay attention because they are directly affected. Second, we can respond quickly when we choose to. We are slow but not stupid. Third, we can make an absolutely remarkable turnaround.  There will be a Great Awakening.

But won’t it be too late? It will certainly be very late. He doubts that we will accept the need for the change for another few years, which means that a great deal more will be required than would have been the case if we had started earlier. He looks at what is necessary, concluding that we need to return to below one degree of global warming. Two degrees is an inadequate goal and a plan for failure. To those who say it is impossible he points to the impossible things that were achieved quickly during World War II.  He and his friend and colleague Jorgen Randers, one of the authors of the Club of Rome 1972 report The Limits to Growth, have worked out a one-degree war plan which is outlined in the book. (A draft copy of the full plan can be seen here.)

The plan has three phases. The first, years 1-5, is the climate war. Modelled on the action following the entry of the US into World War II it launches a mobilisation to achieve a global reduction of 50 percent in greenhouse gas emissions within five years. This would shock the system into change and get the job half done by 2023 if we start in 2018.  Phase two is a fifteen-year push to move the world to net zero climate emissions by 2038. Phase three is a subsequent eighty-year haul to remove sufficient CO2 from the atmosphere to move the climate back towards the preindustrial “normal”.

Some excerpts from the plan give a flavour of what is proposed for the climate war five-year phase. They include cutting deforestation and logging by 50 percent, closing one thousand dirty coal power plants, rationing electricity and rapidly driving efficiency measures, refitting one thousand coal power plants with carbon capture and storage, creating huge wind and solar farms in suitable locations, reducing airplane capacity, recycling and reusing all used materials, binding 1 gigaton of CO2in the soil, and so on.

Although governments will play a leading role as we pull ourselves back from the brink Gilding sees adequately regulated and guided business and markets as a vital part of the mobilisation, and gives space to discussing how they will deliver the required changes. There are some hard lessons here about business complacency and failure to read the science. Many companies won’t make it.  Many will. Gilding draws on the creative destruction theories of Austrian economist Joseph Schumpeter, of an economic structure incessantly revolutionised from within.

In crude terms for business and investors, where is the money to be made? Gilding offers some cautious predictions himself in the energy field. He sees a likely dramatic marking down of the value of oil and coal companies as it becomes apparent that a high percentage of known economic reserves may never be extracted. Carbon capture and storage he thinks remains unlikely to be employable on a wide enough economic scale to rescue coal. Nuclear power, though far preferable to climate change, is surrounded by serious safety questions. He plumps for renewables, particularly wind, solar and geothermal, recommending Al Gore’s book Our Choice for an analysis of the whole picture.

Successfully meeting the challenge of climate change is only the beginning. We still have to cope with the end of growth. Climate is not the only boundary we have come up against. There isn’t room here to explain in any detail Gilding’s take on an economy no longer dependent on material growth, but he espouses the steady-state economy which he considers long understood by capitalism’s founding fathers as a logical point we would eventually arrive at.  He tackles the questions of poverty and inequity, neither of which have been well served by the current growth economics, and sketches the rough outlines of a fully satisfying life with less stuff and more human interchange.

It’s an invigorating book. Gilding doesn’t sell his readers short on sustainability or the climate issue which is right at its heart. He is utterly realistic about climate change and the drastic measures now required to avert it. Whether he is equally realistic in believing that we will in the next few years take those drastic measures may be debated by some. Perhaps we will take the path to collapse rather than the more immediately demanding alternative. Gilding himself has faced that possibility. But his conviction that we will do whatever it takes to avoid terminal decline once we realise what is happening doesn’t sound hopelessly idealistic, nor does the kind of plan he outlines to get us there.

Note: Paul Gilding will be a guest of the Auckland Writers & Readers Festival in May.

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